Tuesday, August 07, 2007

Brand Value

Advertising makes us want stuff. What's the normative significance of this fact? The most obvious thought is to see it as a bad thing: marketing manipulates our preferences, effectively brainwashing us into wanting things that don't necessarily cohere with our most deeply-held values. On the other hand, it might be argued that advertising "creates value" by increasing the satisfaction we get from advertised products. (Cf. The Visible Hand -- apparently food tastes better if it comes in a McDonalds wrapper!)

Marketing aims to shape the cultural meaning of a brand. If someone wants to associate themselves with a particular lifestyle, buying an appropriately advertised label may be an easy way for them to send the desired signal. Advertised consumer goods thus serve people who want to brand themselves, perhaps to affirm their cultural identity or to gain status. Does this make advertising worthwhile after all? (I've always thought that marketers were scum... should I revise my opinion?)

This ties in with important debates over intellectual property and "trademark dilution". See Boing Boing:

It used to be that trademarks were intended to protect "consumers" (that's us) from being tricked into buying goods under false pretenses. If it said "Coca-Cola" on the can, there had better be Coke inside, and not Pepsi or Crazy-Bob's-Discount-House-of-Soda brand. When a competitor of Coke's shipped a bottle of stuff that was misleadingly packaged or labelled, Coke's authority to sue its competition derived from its need to protect us, not its bottom line. It didn't get to sue because it owned Coca-Cola, but because it was acting as a proxy for its customers, who were being decieved by con-artists who mislabelled their goods...

But as time went by, trademarks stopped being about us and started being the embodiment of brands (which, as Surowiecki points out, are on the wane and were probably never as important as we thought to begin with).

This meant that trademarks weren't just things that helped the public know what they were buying -- they are a kind of pseudo-property. Pseudo-property that could be defended on the basis that it "belongs" to a company, who need to be protected from having the value of their marks "diluted" or "tarnished."

So now you have Visa going after eVisa.com -- a company that helps you get travel visas -- and Air Canada going after shareholders who used the Air Canada logo on communications about problems with Air Canada management. Disney's one of the worst, of course, going after daycares that paint Mickey on the walls -- even though there's not an instant's danger that anyone will mistake a nonprofit daycare center for a Disney operation and be misled into patronizing it. Most recently, of course, some of Nintendo's lawyers got a wild hair up their ass because someone mentioned some game titles on a profile-page on a porn/community site and freaked out because the association might damage their brand.

All these new and exciting uses of trademarks -- shutting up critics, blocking new entrants into the market, and controlling the speech of private individuals -- are justified by the importance of brands.

If branding is just a way for companies to manipulate consumers and rip us off, then such heavy-handed legal "protection" is simply evil. But if brands create real (cultural) value for consumers, then there's some trade-off here, and so a real debate to be had.

Actually, even granting this value, I think the pro-marketing argument fails. It shows the value of imbued significance or cultural meaning -- but there's no reason to think that this meaning is best shaped by advertisers. A far more attractive alternative would be for such meanings to emerge from the distributed contributions of cultural citizens, as per my old post: 'Democratizing Culture'. We don't need advertisers to impose cultural meanings from On High. So, my low opinion of them remains...

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11 comments:

Marketing executives are scum. The designers and photographers I have sympathy for: they're artists no less than Da Vinci or Donatello. Especially when it comes to the relationship of filmmakers and photographers to advertisers you'll find many directors, Jean-Luc Godard for example, and photographers pushing advertisement towards more and more artistic endeavor. Is this no less a cultural imposition than Renaissance creating beauty with the trappings of the wealthy Italian and Dutch merchant class? The only difference I see between a sub-Michelangelo Renaissance artist and a sub-Toni Frissell (photographer who began with Vogue magazine) is that the value system of a Renaissance bourgeois was primarily cultural, whereas the advertising executives today rely on an economic value structure.

In all truth I think there are good and bad sides to advertising. The fundamental problem with advertising which you identified was its propensity to deliver mis-information. Now mis-information is terrible, because it convinces you to buy something, when ex-post you would have wanted the thing you original decided against.

However, the article I found on stuff said that having the McDonalds wrapper made people believe that the food tasted better. As a result, the sensory experience was completely different and it gave a higher amount of satisfaction than the non-branded product. In cases like this, where the brand added value to the product, advertising is good.

Now I don't have a problem with current McDonalds advertising. This is because I believe they are not advertising mis-information, they are advertising in ways that get our senses all excited. It makes sense for McDonalds to not provide mis-information, as they are not selling a durable good, and as a result want repeat customers. As a result, a social problem from their advertising only exists if their good is addictive.

I think associating coca cola or macdonalds with "good times" IS advertising misinformation.

idealy stores would only sell benefits like "macdonalds - on every corner reliable quality - not as unhealthy as you think - your kids can buy the fruit bags - if you offer it to your friends they know what they will get and know our menu, many are open 24 hrs if thats what you want, we got it."

actually macdonalds is one of the best :) coke is one of the worst......

I pretty much agree, but I’d amend your claim to: ‘Advertised consumer goods thus serve people with money who want to brand themselves, perhaps to affirm their cultural identity or to gain status.’

After all, you still have to buy the stuff to get the cultural value out of it. So lifestyle branding redistributes cultural value from poor to rich. It takes people’s material poverty (or wealth) and makes it more connected to social poverty (or wealth).

"After all, you still have to buy the stuff to get the cultural value out of it."-Not necessarily. Flipping through Vogue or Esquire, or enjoying a Budweiser TV commercial is culturally significant without obligating you to go and purchase Versachi sunglasses or buy $4 beers in a popular dance club. It (the advertisement) only makes you--the poor schlep who cannot afford Versachi--admire it as "clever", "trendy", "cool", etc.

True, you can bask in the self-satisfaction of my excellent taste without neding to buy things. But somehow I think you're going to be less than socially impressive if you wander around with a scrapbook of pictures of things you would own if they were more affordable!

Matt - I'm not sure there's any "misinformation" per se; nobody believes the crap they see on TV, the worry is instead that it manipulates our desires. (I'm not sure why this would become okay just because it falls short of full-blown "addiction".)

"I'm not sure why this would become okay just because it falls short of full-blown "addiction"."

The distinction lies in the way that the advertising influences our desires - after all they can reach their goal of making us consume their burger in two ways: increasing the value of consuming it, or increasing the cost of not consuming it.

If McDonald's advertising increases the benefit of consuming a McDonalds product then it is creating value - and thereby increasing welfare.

If the advertising is increasing the cost of not consuming McDonalds then such advertising is welfare reducing and is not a good thing.

Both competition and time add further issues to look at in terms of the optimality of advertising - but the example illustrates that the fact advertising influences desires does not have to be a concern.

Matt, you presuppose a crudely hedonistic conception of welfare. For those of us who think there's more to the good life than mere subjective satisfaction (autonomy, for example), or who have strong second-order preferences to not be manipulated in such a way, advertising may still be considered harmful.

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